Everything You Need to Know About the Pre-Tenancy Process
You are a landlord new to the rental market. You have found a promising tenant and you would like to move them in as soon as possible. So, what next? To start a new rent arrangement, you will need to follow the pre-tenancy process.
Make Sure You are Happy with the Draft Tenancy Agreement
The first thing you will need to do is create a draft tenancy agreement. This will outline the main terms of your leasing arrangement in advance, so you and your tenant can be on the same page. The draft contract usually details the tenants right to occupy the property, confirms the rent amount and states when the lease will commence.
Run Through the Legal Checks
The law requires you to check that your property is fit for purpose. First, you will need to check your property’s gas, making sure that appliances have been safely installed. An engineer will be able to help you with this and they will also provide you with a report to confirm the checks. You will then be able to give a copy to your tenant. You will also have to check the safety of the electricity in your property, making sure that the house’s sockets, light fittings, and cookers are fit for use.
Next you will need to examine the fire safety measures you have in place. This means making sure there’s a smoke alarm on each storey of the building, there’s a carbon monoxide alarm in any room with a solid fuel burning appliance (e.g. a coal fire), that escape routes are accessible and that furnishings are fire safe. If you are managing an HMO building you will also need to provide fire alarms and extinguishers.
If your tenant has blinds in their property, you will need to check these too. Ensure that your blinds have safety devices connected to prevent any hazards. Blind cords can pose a risk for young children so it is important not to skip this step.
Lastly, you will need to perform a risk assessment for Legionella, which is a type of bacteria. You can minimise the risks of Legionella by flushing out the water system pre-tenancy, checking temperature control parameters and removing redundant pipework.
Create an Inventory of the Property
Before your tenants check-in you will need to make sure your property is spotless. Not only will this make a good impression, but it will also set a standard of what should constitute as clean. This is an important part of the pre-tenancy process.
From there, you will need to take inventory of the property’s items and the starting condition of the property, otherwise known as a ‘schedule of condition’. If your property is damaged, ends up very unclean or if any items go missing, you will be able to evidence this by referencing your pre-tenancy inventory.
To conduct an inventory, you will need list every item in the property (even the walls), state their condition and take a clear picture for further evidence. The way you should describe each item should be sensibly ordered, in plain English and comprehensive. This document may be subject to dispute, so it is important to make sure you cover all the bases in your inventory.
Checking the Tenant In
At this stage in the pre-tenancy process, you will want to check-in the tenant to make sure you are happy with the inventory you have created. You will need to walk them around the property and make sure they understand the checks you have and the condition of the property overall. Your tenant should sign the inventory to confirm that they have been shown around and that you have pointed out any issues.
Confirm Tenant References
Finding the right tenant can be tricky but conducting a thorough background check can certainly help you weed out the riskier tenants. In the tenant referencing process, you will need to check several things.
To begin, you will need to perform a credit check on your tenant to get an overview of their financial history. To do this, you must seek the tenant’s permission first. A credit check can be obtained through a credit referencing agency. This information will reveal whether your tenant has received any CCJs or has filed for any insolvencies, likely due to multiple missed payments. The report may also provide you with a tenant risk score to see how wise it is to lease to them.
It is also wise to contact your tenant’s previous landlord for a reference. They will provide you with an overview of the tenant’s behaviour and their history of payments. You may also want to ask for their employers contact details to confirm their employment.
Landlords and agents will also need to check the immigration status of the potential tenant. This is done by performing a Right to Rent check. For this, you will need to obtain a copy of their passport or residence documents to make sure they can rent.
If you are unsure of your tenant’s ability to pay, you can seek a reference from a guarantor. This is someone who will cover the rent payments if for any reason your tenant cannot pay. You may also want to confirm a guarantor if your tenant does not have a substantial history of renting. You will need to get the guarantor to sign an agreement, but it is sensible to make sure the guarantors’ responsibilities are entailed in the tenancy agreement too. Tenants commonly choose family members as their guarantors.
Signing the Contract and Deposit
Once you have completed all the steps above, you will be able to sign the final contract. At this point, you and your tenant will be legally bound to the agreement. For this reason, make sure you are happy with all the details in the contract.
Once the contract has been signed by all parties you will then be able to invoice the tenant for the deposit. You will need to place the deposit into a government deposit scheme within 30 days.
If you’ve found our guide on the pre-tenancy process useful, you can find more information on property processes in our blog.